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| Watches |
Market Timing
James D. Malcolmson
02/02/2004
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When a Patek Philippe World Time wristwatch sold for a record price of just over $4 million at auction in 2002, it surprised everyone, even the appraisers. The fact that the timepiece not only surpassed, but more than doubled the previous record for a wristwatch, illustrates the upward
pressure on collectable watch valuations caused by a flood of new money coming into the market in the past decade.
 | Photograph by Gina Binkley |
As in the upper echelons of the art market, deep-pocketed bidders and the frequently stratospheric prices they pay have begun to shape our image of the fine watch auction—images made
all the more piquant by the fact that this market did not even exist two decades ago. Watch industry veterans and auctioneers who recall those temperate times apply such adjectives as "unimaginable" and "crazy" to the present
heated environment.
The upward trend may make us ask what it portends for future valuations. Does any room for growth remain after such a dramatic escalation? Unfortunately for enthusiasts, horology as a medium for investment is hampered by a relative lack of historical yardsticks with which to measure trends. Information and understanding about the pieces themselves, while much better than it was, nevertheless fails to completely explain today’s prices, which can unsettlingly be described as unprecedented.
The number of collectors vying for pieces at auction and through other channels has increased substantially in the last decade. Watch auctions today can easily attract 150 active bidders—live and via telephone and the Internet—whereas 10 years ago there would typically be only 20 or 30 bidders. The aftermarket has grown hand in hand with the Swiss luxury watch industry, which, after nearly collapsing under pressure from quartz watches in the 1970s, found new life in the 1980s as a status and lifestyle statement. Collectors’ understandings of fine watches, however, have sharpened more recently. "Prices in wristwatches have increased significantly since 2001, probably because people have come to recognize that a watch can be a real piece of art," offers Geoffrey Ader, watch expert at Antiquorum Auctioneers. Certain watches have shot up astronomically, with increases of 200 percent to 300 percent for certain complicated Patek Philippes. In general, prices are up 30 percent to 40 percent since 2000. "More people are becoming collectors, and it is this increase in people that is really driving the prices."
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